Major insurance broker stocks took a sharp hit in the markets after the launch of a new AI‑powered insurance tool that triggered fears of disintermediation and technology‑driven disruption. A Barron’s report notes that shares of big brokers such as Marsh & McLennan, Aon, and Goosehead Insurance plunged — some by as much as 25 % in a single session — after news broke that a ChatGPT‑based AI app could provide personalised home insurance quotes and sell policies directly to consumers. Investors reacted quickly to the potential threat this posed to traditional intermediary roles.
The AI application in question, developed by the online platform Insurify and approved for use within ChatGPT, allows users to receive instant personalised quotes and may soon enable full policy purchase conversations without human brokers. Such automation could streamline comparison shopping and reduce reliance on traditional brokers for straightforward personal insurance purchases, prompting fears about long‑term revenue pressures for established firms.
Market distortions extended beyond U.S. brokerages, as European insurer stocks also slid due to contagion effects and similar concerns that AI could compress pricing power and reshape how coverage products are marketed and purchased. Analysts suggest that even well‑established insurers may see margin pressure if AI tools continue automating parts of distribution and underwriting traditionally performed by humans.
Despite the steep sell‑off, some analysts argue that the reaction may be overblown in the near term since complex insurance advisory and risk‑management tasks still rely heavily on human judgment and trust relationships. They also note that AI could complement brokers rather than replace them entirely — especially in commercial and complex product segments — even as markets reprice long‑term technology risks.
